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Castor project sends Project Bonds Initiative shockwaves, taxpayers hit worst

Bankwatch Mail | 2 December, 2014 | Download PDF

In July 2013, the much-hyped joint European commission/EIB ‘Project Bond Initiative’ (PBI) had scarcely got off the ground – in its pilot phase at least – when unusual natural events took over. Work at the EUR 1.7 billion Castor underground gas storage plant off the coast of Valencia commenced in summer 2013. But by mid-September the Spanish government was forced to halt work at the plant after 220 mini earthquakes in the area were detected in less than a month. Local residents reported the tremors following injections of natural gas to prepare Castor for operations. Subsequent research has found that the gas injection provoked 1,000 earthquakes in the region.


European Ombudsman hammers EIB over Bosnian bridge maladministration

Bankwatch Mail | 2 December, 2014 | Download PDF

An unprecedented ruling and serious tough talking emanated from the European Ombudsman at the end of October following an investigation into the EIB’s involvement with a bridge construction project in Bosnia and Herzegovina. Describing the approach taken by the EIB in the case as “wholly unacceptable”, the Ombudsman’s conclusion pulled no punches in asserting that the bank’s “maladministration risks putting into question the European Union’s commitment to strengthening the rule of law in Bosnia and Herzegovina.”


EIB and EBRD transparency nosedive needs fixing – and fast

Bankwatch Mail | 2 December, 2014 | Download PDF

Operational transparency standards at the European Investment Bank and the European Bank for Reconstruction and Development continue to deteriorate, according to the 2014 Aid Transparency Index (ATI) published in October by aid watchdog Publish What You Fund (PWYF).


EBRD-EIB role in Slovak private equity gas debacle questioned

Bankwatch Mail | 2 December, 2014 | Download PDF

The European Bank for Reconstruction and Development (EBRD) has revealed, in a letter of late October to Bankwatch’s Slovak member group Friends of the Earth-CEPA, that the EnerCap Power Fund, a private equity investor, has pulled out of the controversial COGEN gas power plant being developed in the northern Slovakian town of Považský Chlmec.


Another chip off the EBRD block – Kronospan expansion in Belarus

Bankwatch Mail | 2 December, 2014 | Download PDF

In October this year, the European Bank for Reconstruction and Development (EBRD) approved an up to EUR 50 million loan to a Belarusian subsidiary of the Austrian company Kronospan for the expansion of a particleboard facility at Smorgon in the Grodno region of Belarus. Belarus will provide a guaranteed return on investment for both Kronospan and the EBRD. With the country’s rich wood resources, generous state tax incentives, weak legal environment, toothless trade unions, cheap labour and a generally stifled civil society, the EBRD and its client are not likely to run into the same environmental and legal difficulties experienced by Kronospan in other eastern European countries.